Posted on 10/17/2008 12:19:27 AM PDT by nickcarraway
As oil prices zoomed toward an unheard of $147 a barrel this summer, it seemed every analyst prediction that oil would approach $200 was a self-fulfilling prophecy, until suddenly it was not.
Instead of $200, oil is now $80. Instead of going up, the U.S. has seen the greatest destruction in demand since the oil-shocked 1970s. Drivers have dramatically cut down on driving since November.
Soaring prices for oil and other commodities this summer have turned out to be nothing short of another classic bubble and the bursting may not be over, one analyst said Monday.
"It's just amazing that the market gets suckered into this," said analyst Stephen Schork of the Schork Report, who called the idea of $150 a barrel oil "an obscene number, a perverted, illogical number."
(Excerpt) Read more at iht.com ...
not a busted bubble. just means we’re in for some hard times.
We need Maxine Waters to socialize the oil industry, and stop all this madness.
I agree this means the world is cutting oil consumption because of the recession world wide.
and it’s not just oil but all across the board.
Not anymore. It's below $70 now- back to 2007 prices. Too bad pump prices aren't. Quick to rise, but slower than a turtle to fall. Of course the oil company spokespersons will have some nonsensical explanation as to why this is. They'll just need a few days to come up with one that doesn't expose them for they liars they are. Any excuse will have to be carefully crafted so as to not get all tangled up with the excuses for rapid pump price increases.
k
Exactly why are lower oil prices are bad?
A small shortfall in supply sends prices way up & a small surplus drives prices way down.
For the above reasons, I'm more optimistic than you seem to be. We do seem to be headed for some hard times — but, at least we shouldn't be seeing the “stagflation” of the Carter years.
OPEC has announced that it trying to restrict supply; to hold oil at a target price of about $80/bbl. OPEC has learned that they can't drive prices too high, without hurting the economies of their customers and causing a ruinous (to them)price crash.
Also, OPEC’s stranglehold on energy supplies has gotten much weaker. New sources of oil, in particular the Alberta oil sands; and (if voters are wise) new US domestic supplies will keep OPEC at bay in the short to medium term. Medium to long term, there will be new nuclear plants, clean coal, and some sensible alternate energy sources.
When oil prices are allowed to move with market forces — rather than being set by a cartel; they help bring the economy back to equilibrium. When the economy goes into a recession — the resulting lower oil prices help jump-start it again.
it is bad in the sense that you’re not going to get an extra break. You’re going to use less oil anyway because you’ll have less money to spend for everything. The price is telling us we’re going to be hit by a real recession soon.
If the price was low because of progress such as finding more oil or alternatives, then it would be a good deal. That’s what we’d expect from a Palin energy plan but that’s not the case here.
The reprieve is temporary; we HAVE to start producing oil again.
Good, I was actually considering buying a prius before. Thank god I don’t have too anymore.
prisoner6
You mean that it is bad because for the the scum-sucking, bottom-feeding, comodities-traders who have been going long in crude is bad for the USA???
If that is what you are saying, consider me your eternal, mortal enemy.
Oil is below the $70 range -- at least just barely...
people go long and people go short. it’s really not about the oil but the poor status of the economy.
I want oil to go down but not in this way.
yup. long term policy should not be held hostage to short term prices.
Obama talks about a special hybrid tax credit. I think these tax credits will actually make these cars more expensive just as govt student loans contributed to high tuition inflation. You really want to restrict these special credits and deductions to non market items such as charity.
Not to mention that the supposed extra demand was never sufficient to justify anything like the price boosts that occurred. We got scammed by a bunch of big money folks and, like the Freddie/Fannie abomination, many investment firms became "speculators" to further boost the price. Capitalism is the way to go, but many areas of it have been perverted over the last few years due to government malfeasance.
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